Kenya’s efforts to contain wage bill lose steam

The Jubilee administration’s initiative to slash the ballooning public wage bill and save more funds for development is fast coming to a dead end.

Teachers demonstrate in Kisii town during last year’s strike to demand for higher pay. [PHOTO: FILE/STANDARD]

In the first six months of the current financial year, the wage bill seems to have dramatically shot up to unsustainable levels as more money goes to paying civil servants’ salaries. According to the Controller of Budget, Agnes Odhiambo, between July 2015 and December last year, the Government spent close to 17 per cent of the national income on personnel emoluments, making a mockery of President Uhuru Kenyatta’s much-publicised initiative to contain the public wage bill.

In June last year, President Uhuru Kenyatta launched a job evaluation exercise led by the Salaries and Remuneration Commission (SRC). The President hoped that with the launch of the exercise, the Government would be able to slash the public wage bill from a high of 11 per cent of the country’s income then, to the ideal global benchmark of seven per cent.

The President noted that while the number of public servants had grown by 3 per cent per year over the last five years, the public sector wage bill had grown by an average annual rate of 20.9 over the same period. “If such a trend were allowed to continue, it would almost certainly result in higher taxes, which would negatively impact on the poor,” he said then.

And going by the figures given by the Controller of Budget, the Government is way off the mark. The SRC seems to have lost steam and has been missing from the public limelight. During this period, Treasury was able to receive about Sh817.7 billion, a decline from Sh832 billion in the same period in the previous financial year, according to the Controller of Budget.

Personnel emoluments gobbled up Sh124 billion (49 per cent) of the Government’s Sh267 billion recurrent expenditure for the period under review.

The Teachers Service Commission (TSC), with a payroll of about 300,000 employees, was the main culprit, taking up 69.4 per cent of the total personnel emoluments expenditure by the ministries, departments and agencies (MDAs). TSC received a total of Sh85.9 billion. This was more than the money the State pumped into the construction of roads, bridges, canals and dams. The Government spent Sh72 billion on construction and civil works.

Generally, the Government has not been able to redirect much of its expenditure to development from recurrent. In the education sector, while the Government pumped a measly Sh0.5 billion (2.3 per cent) to development expenditure, recurrent expenditure took up a massive Sh128.8 billion (97.7 per cent).

Recurrent expenditure in the education sector has increased from a low of Sh209.3 billion in the financial year 2012-13 to Sh245.8 billion in 2013-14 before peaking to Sh299.6 billion in 2015-16. In fact, while development expenditure has increased by 30.7 per cent, recurrent expenditure has increased even faster by 43.1 per cent.

It is not clear how the public wage bill increased as the Government has neither recruited nor increased salaries significantly. For long, teachers have been clamouring for pay increases, and once and again their efforts have been thwarted by the Government’s insistence that a pay-hike would see the public wage soar to unsustainable levels.

The second highest recipient of personnel emoluments was the State Department for Interior under which many law enforcement agencies fall. This department received Sh14.2 billion. It was followed by the National Assembly, which got Sh2.1 billion.